Baker Hughes Incorporated (NYSE: BHI) has reported that the North American rig count totaled 2,240, up from 2,230 the week before and down from 2,460 in the same period a year ago. The increase reflected the addition of 22 oil rigs and 5 natural gas rigs in Canada, while US oil rigs fell by 7 and US natural gas rigs fell by 11. One added ‘miscellaneous’ rig brought the total US loss for the week to 17.
The total number of US rigs fell to 1,914 from 1,931 in the previous week and down from 1,974 in the same period a year ago. The oil rig count is up by 359 rigs year-over-year while the number of US natural gas rigs has dropped by 416. Canadian oil rigs have declined by 93 year-over-year and natural gas rigs are down 67.
The declining demand for gas rigs comes about due to low natural gas prices, which are causing producers to cut back on gas production. Coupled with higher costs, the gas drilling slowdown could weigh on growth in the second half of the year for services companies like Baker Hughes, Schlumberger Ltd. (NYSE: SLB) and Halliburton Co. (NYSE: HAL), among others.
The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up 0.2% today, at $41.36 in a 52-week range of $32.54-$45.14.